AFP withdrawal: in which cases can I use my pension fund and what requirements do I need to meet?

The Pension Fund Administrators (AFP) are private institutions that have spent many years in our country regulating the amounts corresponding to citizens in terms of retirement, disability and survival, as well as burial expenses. In this sense, there are various mechanisms to access the money you have saved in your private pension fund, such as the Special Early Retirement Regime (REJA), 25% to acquire a property and the law that allows access to a minimum pension and withdraw surpluses from the AFPs. Next, we invite you to know each of these modalities and what are the disbursements that affiliates can request.

AFP Retirement: how to apply for early retirement?

According to Law No. 31332 that came into force in September 2021, a 50 year old affiliate can access 95.5% of their funds if you are unemployed for 12 consecutive months. To advance retirement, the following requirements must be met:

Due to unemployment:

• Be at least 50 years old when you start the process.
• Being unemployed for 12 months or more, consecutively.
• Submit an Affidavit of Unemployment Situation.
• Present the document of certain date that certifies the cessation.

By ordinary modality:

• Being over fifty 50 years of age.
• Demonstrate 72 months of contributions in the last 120 months prior to the request for the benefit.
• Have a pension calculated in the Private Pension System, which must be greater than or equal to 40% of the average of your remuneration received and income declared during the last 120 months. That is, in the last 10 years.
• Voluntary contributions that exceed 20% of the individual account for the capitalization of mandatory contributions with a stay of less than nine months in the CIC are not considered.

AFP Retirement: how to dispose of my fund to buy a home?

According to Law No. 30478, an affiliate can request up to 25% of his pension fund for the acquisition of a property, either at the beginning or at the end of your retirement. In this sense, it is important to emphasize that, if the contributor wants to access this resource, he must not have owned the home and this benefit only applies to the first purchase or the repayment of the mortgage loan.

To request the 25% withdrawal, the affiliate must know the exact value of his fund and the amount he may require. These are the steps to follow:

• The contributor must go to a financial institution and request the mortgage loan.
• The entity must deliver a “pre-compliance document”.
• Once this document is obtained, the affiliate must request the AFP to dispose of 25% of his pension fund.
• Then, the AFP evaluates the application and, if accepted, it will send the financial entity a “communication of provenance” within 10 working days.
• Finally, when the mortgage loan for the purchase or amortization of the first home is approved, the AFP makes the disbursement of the approved amount directly to the financial institution within a period of 10 days.

AFP withdrawal: how to withdraw the surplus from my pension fund?

According to Law No. 31670 that creates minimum pensions and promotes voluntary contributions in the AFPs, The affiliate can define the amount of the pension to which he will access when he retires, but this must not be less than the Basic Consumption Basket, which is equivalent to S/378 and needs to be accumulated up to S/85,000. This will allow you to set a pension savings goal for the administration of your individual capitalization account.

In addition, the aforementioned rule authorizes the Ministry of Economy and Finance to expand the scope of contributors who can request tax refunds, both in the fourth and fifth categories or any other balance held by the member. Finally, the MEF specified in the regulation that access to the minimum or surplus pension will be from the age of 65, which is the retirement age in our country.